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The Burgeoning Battle For Travelers To Central And Eastern Europe: As U.S. Airlines Set Their Sights On International Routes, How Will The Contenders Respond? Product Image

The Burgeoning Battle For Travelers To Central And Eastern Europe: As U.S. Airlines Set Their Sights On International Routes, How Will The Contenders Respond?

  • ID: 228306
  • November 2004
  • Region: Global, Eastern Europe, Europe, United States
  • 48 pages
  • Global Advertising Strategies

Major U.S. airlines are looking for growth opportunities within Central and Eastern Europe as a way to escape realities of a grim domestic market. As they grapple with the possibility of bankruptcy, a number of major U.S. airlines are looking for growth opportunities within Central and Eastern Europe.

U.S. airlines are rapidly adding transatlantic routes with a combination of new direct flight options and indirect code-share routes in cooperation with alliance partners. Although Delta is currently the only U.S. carrier flying nonstop to countries in Central and Eastern Europe, Continental is due to begin nonstop flights between Newark and Moscow’s newly-renovated Domodedovo airport in May 2005, in time for the busy summer travel season when traffic is typically 40% higher than in other months.

This report examines the nonstop flight options between the United States and 10 Central and Eastern European countries: Austria, Finland, Greece, Hungary, Poland, Romania, Serbia and Montenegro, Ukraine, Russia, and the Czech Republic (where direct traffic is the sum of arrivals and departures between those countries and the United States). The quantitative analysis includes READ MORE >

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I Executive Summary

II Total Direct Traffic By Country And Carrier In 20022003
Total Direct Traffic By Country In 20022003
Total Direct Traffic By Carrier In 20022003

III U.S. Airlines' New International Strategies

IV Trends In The Global Airline Industry
Alliances Help Weather Rough Times

V Nationality Of Passengers

VI Seasonality In Travel To Central And Eastern Europe

VII Central And Eastern Europe (Cee) As A Destination

VIII Conclusions And Predictions For 20052006

IX Direct Traffic By Country
Poland
Total Direct Traffic
Top Airlines
Routes
Change In Total Direct Traffic By Route
Seasonality
Russia
Total Direct Traffic
Top Airlines
In Depth: The Race To Capture The U.S.Russia Direct Flight Market
Routes
Seasonality
Austria
Total Direct Traffic
Top Airlines And Routes
Seasonality
Greece
Total Direct Traffic
Top Airlines And Routes
Seasonality
Finland
Total Direct Traffic
Top Airlines And Routes
Seasonality
Czech Republic
Total Direct Traffic
Top Airlines And Routes
Seasonality
Hungary
Total Direct Traffic
Top Airlines And Routes
Seasonality
Romania
Total Direct Traffic
Top Airlines And Routes
Seasonality
Ukraine
Total Direct Traffic
Top Airlines And Routes
Seasonality
In Depth: Aerosvit's Successful Launch Of Nonstop Flight Services To The United States
Serbia And Montenegro
Total Direct Traffic
Top Airlines And Routes
Seasonality
In Depth: The Underserved Balkan Region

X. Appendix A
Central And Eastern Europeanamericans
Airline Preferences And Travel Behavior: What Our Research Shows
Purpose Of Travel To Cee
Frequency Of Air Travel To The Cee Region
Factors Influencing Choice Of Airline
Preferences In Method Of Ticket Purchase
Desire To Participate In Frequent Flyer Programs

XI. Methodology And Data Sources

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Not enough non-stop options:
The current menu of options available to fly non-stop from the United States to locations in Central andEastern Europe (CEE) is short. With European Union expansion, increased business relations between the U.S. and CEE, and travel publications such as Condé Nast Traveler touting CEE cities as top destinations, why are there not more direct flight options? Delta is currently the only major American airline flying nonstop to CEE countries.

U.S. airlines are drawing down capacity on their domestic flight menus and giving it to their international menus, a trend that shows that with many U.S. airlines on the verge of bankruptcy, they have no choice but to compete internationally.

Demographics and trends:
Demographic data shows that the populations of ethnic groups such as Polish-, Ukrainian- and Russian- Americans are growing, and their spending power is increasing. This makes travel to their native countries, and sponsoring relatives to visit the United States, regular expenditures.

New routes, growing alliances:
Given these trends, Central and Eastern Europe appears to be a latent market that U.S. airlines might look to tap as they expand international routes. Some U.S. carriers are paying attention: in September-October 2004 many of them began announcing new non-stop routes to locations in Western and Eastern Europe. Among the most curious news is that Continental will begin daily direct flights from Newark to Moscow's newly-renovated Domodedovo airport in May. This development will likely pose a new challenge to Aeroflot and Delta, which have dominated U.S.-Russia non-stop travel with their code-sharing of the New York-Moscow Sheremetyevo route.

In 2005 we predict that more U.S. airlines will get in on the game. What will this mean for CEE Airlines such as Ukraine's Aerosvit, Poland's LOT, and the Czech Republic's CSA, all who currently enjoy complete domination over flights from the United States to their respective countries? For CEE airlines that are members of alliances, U.S. airlines' redirected attention on the overseas market is a good thing because those U.S. partners will feed more traffic to hubs in the U.S. to fly to destinations in Central and Eastern Europe. The burgeoning battle for the overseas flight market is increasingly being fought through alliances. Hence those airlines that have not yet solidified membership in alliances are at a disadvantage as they assert their share of CEE travelers.

DIRECT AIR TRAFFIC BY COUNTRY AND CARRIER IN 2002-2003
The focus of the report is direct flights that connect the United States and ten countries in Central and Eastern Europe - Austria, Finland, Greece, Hungary, Poland, Romania, Serbia and Montenegro, Ukraine, Russia, and the Czech Republic. Although Finland and Greece are not traditionally considered in the Central and European region, they are included due to their geographic proximity and long-established flight services to the region. Direct traffic is the sum of arrivals and departures between those countries and the United States.

A snapshot of direct air travel between the United States and Central and Eastern Europe:

TOTAL DIRECT TRAFFIC BY COUNTRY IN 2002-2003 (Table Provided In Full Report)

The full report contains detailed profiles about direct air travel to each of these countries, including carriers, city routes, and seasonality. The report findings are based on analysis of direct flight data and interviews with airlines serving the CEE region, including CSA Czech Airlines, Ukraine’s Aerosvit, Hungary’s Malév, United, Continental, and Delta.

TOTAL DIRECT FLIGHTS PER CARRIER IN 2002 AND 2003 (Table Provided In Full Report)
There were 25 airline carriers that flew to or from the ten countries profiled in the report. The major carriers, of which there are 11, are represented in the table below; those not represented are charter carriers, which are discussed in the full version of the report.

Analysis:
A quick look at the table above shows that passengers wishing to fly direct from the United States to Central and Eastern Europe have a limited choice of airlines. In most instances, there is only one carrier available. And in those situations when there are two carriers flying to a given country, they are often code-sharing, as is the case with Delta and Aeroflot's direct flights with Russia. There are many signs indicating that the number of carriers flying between the United States and the CEE region will grow in 2005, heightening competition and providing more options to passengers. nIn the United States, almost all of the major traditional airlines are in or are heading toward bankruptcy. This is due to excess capacity in the domestic market, rising fuel prices, and competition from low-cost carriers. Some airline analysts estimate that there is as much as 25 percent too much capacity in the domestic market, preventing airlines from raising fares to cover rising fuel prices.

So what are Continental, Delta, United, and American doing to protect themselves from the scourge of discount competitors such as Southwest, AirTran, and Jet Blue? They are taking capacity from domestic routes and giving it to international routes. The full version of the report examines the movements of U.S. airlines to incite a battle for this largely unnoticed CEE market.

Note: Product cover images may vary from those shown
Note: Product cover images may vary from those shown

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